AMSL, that offers mobile money services under the brand name Airtel Money, is proposing to convert the existing pre-paid payment instrument licence into a Payments Bank license as per the guidelines prescribed by the Reserve bank of India, Bharti AirtelBSE -0.64 % said in a statement.

Kotak MahinBank Ltd. will pick up a 19.90% in AMSL, subject to regulatory approvals. The two companies however didn’t divulge any financial details.

“The RBI’s vision for differentiated banks represents a significant step in furthering India’s financial inclusion agenda. The RBI guidelines provide an exciting and challenging opportunity for an entity like us to contribute in a meaningful manner to drive financial inclusion,” Gopal Vittal, MD and CEO (India and South Asia), Bharti Airtel said in the statement.

Vittal added that Kotak’s banking expertise will help Airtel deliver financial services to millions of unbanked citizens across the country.

Airtel is the largest mobile services provider in India with over 215 million subscribers and with 31% revenue market share. The company’s mobile money service was launched in 2011.